The NSW government has rejected Crown Resorts’ bid for a tax reprieve, as its Sydney casino prepares to cut almost 200 jobs and reduce its gaming operating hours.
Treasurer Daniel Mookhey told the Herald table rate duties at Crown Sydney will increase as planned despite Crown’s plea for a rewrite of a decade-old $1 billion tax agreement.
NSW Treasurer Daniel Mookhey has rejected Crown’s bid to renegotiate a planned tax increase to the profits made from its table games Credit: Janie Barrett
The business informed staff on Monday that it had been forced to cut another 180 jobs and reduce the operating hours of its remaining casino floor in Sydney from next week due to a lack of customers and the broader macroeconomic environment.
Crown Sydney closed one of its two gaming floors in August and made 95 roles redundant. The latest planned cuts bring the total number of job losses over the past two months to 275.
Crown entered an agreement in 2013 stipulating it would pay the government at least $1 billion in licence fees and gaming taxes over the first 15 years of full operations at its Barangaroo casino.
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The Herald recently revealed Crown was seeking a rewrite of the tax pledge, arguing the economic and regulatory environments have changed, its business has suffered significant negative impacts and the 10-year-old agreement is no longer fit for purpose.
The government has now rejected the request but said it would continue to talk to Crown about its operating model and regulatory environment.
Mookhey recently negotiated a revised poker machine duty rate increase with rival NSW casino group Star Entertainment after the ASX-listed group said the original arrangement would bring it to near extinction.
“The previous government had bungled their casinos policy. It was one of the most difficult challenges I inherited. These arrangements will see both casinos pay higher taxes,” Mookhey said.
Crown told staff on Monday that its Barangaroo casino doors will be closed between 2am and 10am from Monday to Thursday and between 4am and 10am on Fridays. It will now open on the weekend at 2pm and close at 4am on Saturdays and 2am on Sundays. The changes come into effect next Wednesday.
Crown and The Star have grappled with expensive remediation costs following historic anti-money laundering failings and tax changes in NSW.
Crown posted a $199 million loss last year, a significant improvement on its near-$1 billion loss in the COVID-19-affected year prior, when it was hit with multiple financial penalties and overhauled the business following historic anti-money laundering and counter-terrorism failings.
A spokesperson from the Blackstone-owned casino operator confirmed the job cuts on Monday and said the bulk of the affected roles will be in frontline gaming operations, with some jobs in casino support and hospitality also likely to be affected.
Crown CEO Mark McWhinnie says the business would redeploy “as many people as possible”.Credit: Crown Resorts
Crown Sydney’s chief Mark McWhinnie said the business would redeploy “as many people as possible” to its other casinos in Perth and Melbourne and would look to reopen when demand resumes.
“Our priority is to support the 180 impacted team members alongside their union as they determine their next steps,” McWhinnie said.
Crown Sydney was designed to suit international high rollers, with its now-closed mahogany floor boasting 30 private salons. Its customers are now restricted to the crystal floor’s 160 tables and 66 electronic tables instead. As a VIP-only facility, Crown Sydney has no poker machines. A minimum bet of $20 applies.
Crown Sydney was the brain child of former chairman and majority shareholder James Packer, who invested heavily in pitching the Barangaroo tower to Chinese high rollers, who make up about 75 per cent of the global VIP gaming market.
Its strategy has since shifted to bolster the focus on its luxury hotel and many restaurants, following a 2019 investigation by this masthead and 60 Minutes, which revealed Crown had been infiltrated by international criminal syndicates and money launderers.
Since then, government inquiries in the three states where its casinos operate have ruled it unfit to hold a casino licence, and the findings stopped the planned opening of Barangaroo’s $2.2 billion tower in late 2020.
Crown was forced to overhaul its board, management and procedures to satisfy the regulators, who approved a conditional licence for Crown to operate its Barangaroo casino last year.
The conditional licence was recently extended to April 30, 2024.
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